Martin Conlon, Head of Australian Equities at Schroders, doesn’t dispute the quality of Sydney Airport as an asset; his issue is with the price. “Sydney Airport is a good asset; it’s a quasi-monopoly. The issue, as always, comes down to how to pay much for that,” he says. Back in 2005, Macquarie paid approximately $6b in 2005 for the asset. Today there is $14b of equity value, and if you Include debt, people are paying $22-$23b. Earnings have gone up somewhat in this period, but most of the gains have come from people buying at a higher cashflow multiple. “People always, in our eyes, should consider ‘what are you paying for those cashflows,' rather than just blindly buying it because it’s a good asset.” See the latest update for his views on financials, resources, and Woolworths (Sydney Airport discussion is video 5 of 6): (VIEW LINK)


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